Internet Retail Store Insurance

Your Guide to Internet Retail Store Insurance

The best way to protect your livelihood

Young female entrepreneur receiving new orders in her internet retail clothing shop. Find internet retail store insurance.

Internet retail stores sell merchandise primarily online. They may sell anything from groceries to furniture, clothing, and just about anything that you can imagine.

An internet retail store will have many of the same business risks as a typical retail establishment: property losses, lawsuits, and worker injuries. In addition, these businesses also have a tremendous risk for data breaches that can be financially devastating for everyone involved.

That’s why you need a comprehensive business insurance program that covers your unique risks and protects you from large losses that could bankrupt you. A local independent insurance agent can help you find the internet retail store insurance that fits your needs and budget.

Why Do You Need Internet Retail Store Insurance?

There are a number of things that can go wrong for your internet retail store, including the following.

  • Property losses/inventory losses at your home office, warehouse, or distribution centers due to some catastrophic or unexpected event (e.g., fire, smoke, weather, vandalism, etc.)
  • Business interruptions at your home office, warehouse, or distribution centers
  • Injuries/property damage that you cause at your home office, warehouse, distribution centers
  • Product liabilities (a product that you sell injures someone)
  • Employee theft of cash or inventory
  • Delivery drivers involved in automobile accidents
  • Employee lawsuits related to discrimination or other claims
  • Data breaches and other cybercrimes

You need a customized internet retail store insurance program to protect your business from the financial devastation these kinds of incidents can cause.

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What Does Internet Retail Store Insurance Cover?

Internet retail stores need a package of customized business insurance policies designed specifically for online retailers. The policies and coverage included in that package will likely include the following.

  • Commercial general liability insurance: While you typically don’t have customers on your premises, you still likely have suppliers, vendors, and other people who come in contact with your operations. General liability insurance covers claims and lawsuits related to third-party injuries and property damage on your premises.
  • Product liability insurance: If you sell a faulty product that injures someone or makes someone ill, your business may be named as a defendant in a liability lawsuit. Product liability insurance covers damage to the injured party as well as your legal fees, financial settlements, and court-ordered judgments that you must pay.
  • Commercial property insurance: Covers your physical office spaces, warehouses, and distribution centers, and everything inside if they’re damaged or destroyed by certain covered perils. These typically include fire, smoke, severe weather, vandalism, and more. 
  • Business interruption insurance: Provides continuation of income in the event that a covered disaster forces you to close for an extended period while repairs are made. It allows you to continue to pay employee salaries and monthly expenses until you can resume normal business operations.
  • Commercial vehicle insurance: If your internet retail store uses commercial vehicles (e.g., for deliveries), you need commercial auto insurance. It protects you against loss, damage, and liability claims related to your commercial vehicles.

These policies can be customized for your unique business model and the risks that you face.

Do You Need Any Other Important Internet Retail Store Insurance Policies?

Most internet retail stores will need a variety of other customized insurance policies to avoid any gaps in coverage. It’s a good idea to discuss the following with your independent insurance agent:

  • Equipment breakdown insurance: You may rely on computers and other specialized equipment to obtain customer information, keep temperature-sensitive items at the proper temperature, and to store and move inventory around in your warehouse. If this equipment breaks down, it can be costly. Equipment breakdown coverage can help you pay for repairing or replacing the damaged equipment. It may also reimburse you for any income lost due to vital equipment becoming damaged and unavailable.
  • Computers and media coverage (also called electronic data processing coverage): Helps you pay to replace lost data and related lost income if your computers are damaged by a covered loss, such as theft, vandalism, viruses, or malware. It may also pay for physical damage to computers or hardware.
  • Employee dishonesty coverage: Protects your business from financial losses in the event that one of your employees steals from your business or engages in other illegal practices while on the job.
  • Spoilage coverage: Provides compensation for products that require refrigeration if an extended power outage renders them unusable.
  • Workers’ compensation insurance: This coverage, which is required of employers in most states, covers medical treatment for employee injuries sustained on the job. It can also protect your business from a liability lawsuit pursuant to the injury.

These policies can be customized for your unique needs. 

What Is Cyber Liability Insurance?

Your entire business model relies on collecting and storing electronic files that contain customers’ confidential information, like names, addresses, and credit card numbers, as well as highly sensitive user names and passwords. Your customers are at risk for identity theft or fraud if criminals ever breach your systems.

Cyber liability insurance helps you protect your business and your customers’ privacy by paying for investigative expenses, notification expenses (the cost to notify your customers of the breach), future credit card and fraud monitoring services for your customers, your legal defense, settlements and judgments, and even public relations and other related expenses.

How Much Does Internet Retail Store Insurance Cost?

Several factors will have an impact on your internet retail store insurance costs, including the following.

  • The products and services that you sell online
  • The value of your commercial property (buildings, equipment, inventory, etc.)
  • The size and location of your business
  • The number of employees
  • The number of vehicles and drivers that you have (if any)

The more risk exposures that you have (more employees, more than one location, more valuable inventory, several business owned vehicles, etc.), the more you can expect to pay.

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Benefits of an Independent Agent

An independent insurance agent who has experience working with internet retail stores and other similar businesses can help you decide the types and amounts of coverage that you need for your business. The choices you make will determine your cost of coverage.

Independent agents can work with numerous, reputable insurance companies who specialize in your type of business. Together you can review a variety of proposals and choose the best mix of coverage that meets your needs and budget.

What’s more, your agent will be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.

Find and Compare Quotes for Internet Retail Store Insurance

Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.

Your agent will work with you free of charge to get quotes from multiple insurance companies so you can make the best choice.

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TrustedChoice.com Article | Reviewed by Paul Martin

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